(6 marks) Michael has the utility function (x, y) = √x + √y. Michael’s preferences are strongly increasing and strongly convex. You don’t need to show this.
(a) (3 marks) Compute the expenditure minimising demands for x and y as functions of utility and prices.
(b) (3 marks) Compute the CV when prices and income change from (px, py,) = (10,10,10) to (5,20,20).